An Economic System is really and exclusively made up of Producers. The Producers create the Economic System and operate it. They create prosperity for the societies. Any non-producer or counter-producer activity is destructive to Economic Systems and prosperity. The non-producers and counter-producers destroy prosperity for themselves, Producers and societies.

Producers are in or inside the workings of a prosperous economic system. They create and generate the energy for the economic system. They give it life and prosperity. They apply the rules or Axioms of Economics to the economic system. The non-producers/counter-producers are outside of the economic system, they take the energy out of the system and destroy the system. They refuse to apply or use rules or the Axioms of Economics in economics. Economic systems with the presence of non-producers and counter-produces are receding systems. These economic systems sink into recessions and depressions. The non-producers and counter-producers take the life and prosperity out of an economic system.

We will look at economic systems and review how they came into existence through the directed energy thrusts of the Producers.

We have seen the evolution of how money value is created and backed. We have also seen the importance of maintaining a Constant Money Supply. Let’s review the evolution of the economic model. The economic model is a step by step evolution on how money is created and why it is important to maintain a Constant Money Supply.

First: There are individuals in a group of people producing commodities, trades, goods and services.

Second: The people in the group need and want each others commodities, trades, goods and services.

Third: At first these commodities, trades, goods and services were exchanged in ratios to each other among the members of the group. This is called bartering.

Fourth: These ratios define the exchange rates or exchange values of the commodities, trades, goods and services.

Fifth: It became apparent that a symbol was needed to represent the exchange value of the commodities, trades, goods and services. A medium of exchange was developed.

Sixth: A symbol was created to represent the exchange value and it was called money. This symbol became the medium of exchange and it is used in trading commodities, trades, goods and services on the Open Market.

Seventh: This symbol represents the exchange value of commodities, trades, goods and services, in defined terms, called money units.

Eight: Continued production creates more exchange value and this exchange value backs the symbol called money. The exchange value gives money its value, energy, wealth, capital and power.

Ninth: Increasing production increases the exchange value inherent in each money unit and in the money supply.

Tenth: It became obvious that when the money supply is held constant the Constant Money Supply standardizes the money unit as a unit of measure. This standardized unit of measure is used to estimate, assess or ascertain the exchange value of commodities, trades, goods and services. It is also discovered that the economic system becomes secured and standardized when the money supply is held constant. A Constant Money Supply provides security preventing the transfer of exchange value, money value, energy, wealth, capital and power away from the Producers without an exchange returned for it. A Constant Money Supply prevents the non-producer and counter-producer from stealing the value, energy, wealth, capital and power away from the economic system and from the Producers of the value, energy, wealth, capital and power.

There are standardized units of measure for length, weight, volume etc. These standardized measures allow the Producers to function efficiently. These standardized measures lend efficiency to the Open Market and the economic system. They protect the Producers of the commodities, trades, goods and services against the non-producers and counter-producers. It is unimaginable to conceive a society or an economic system without standardized units of measures for length, weight or volume. It is also hard to conceive an economic system without a standardized unit of measure for exchange value, the money unit. The money unit must be standardized in order for Producers, families, organizations, societies, nations, mankind and the environment to prosper.

There are very few if any Constant Money Supply nations or economic systems remaining on the planet today. The lack of Constant Money Supply nations and Economic systems is the source of much of the economic turmoil experienced on the planet today. In an economic system lacking a Constant Money Supply, the non-producers and counter-producers have a field day expanding money supplies. As they expand the money supply they steal the exchange value straight out of the money units, already in existence, and out of the economic system. They steal the value, energy, wealth, capital and power out of the economic systems. A lack of a Constant Money Supply gives non-producers and counter-producers a huge opening into the economic system and into the wallets and purses of the Producers.

A nation or economic system lacking a Constant Money Supply is like having a bank without doors, windows or walls. The non-producers and counter-producers have almost total free rein in stealing the exchange value, energy, wealth, capital and power out of the money units and out of the economic systems as they expand the money supply.

A nation or an economic system with a Constant Money Supply is like having a bank with very secure doors, windows and walls along with absolute explosive proof vaults. The non-producers and counter-producers have no access to money by expanding the money supply. They are sealed out of the economic system and out of the wallets and purses of the Producers. The only way they can have access to money is when they become Producers. They become Producers by creating commodities, trades, goods and services and marketing these commodities, trades, goods and services on the Open Market in exchange for money units. This is the only way anyone can be in an economic system.

Eleventh: Gold was settled on as the most stable material to use when creating a Constant Money Supply. It is fairly rare. It is difficult to bring more gold into existence, making it difficult to expand the money supply.

After the money unit concept came into practice another problem developed. That problem was, “How are we going to find a money unit symbol that is set at a specific number of money units in circulation at one time?” Gold was eventually settled upon. Gold wasn’t 100% set at a specific number of money units but it was as close as they could get at the time. There are no absolutes in this universe. Gold was used because it was as close as they could get as an absolute for maintaining a Constant Money Supply. Establishing a Constant Money Supply with gold created a high level of stability and consistency in the money unit and the economic system.

There are times when the supply of gold was not held constant. This caused economic collapses to occur. There are examples of where the gold money supply was expanded causing failed economic systems.

After Spain’s discovery of South and Central America, they brought huge sums of gold over to Spain from the Americas. Their gold money supply was greatly expanded. The expansion, of the gold money supply, lead to a great inflation. Spain invested this new gold into building a great Navy and military power, leading to an economic collapse in Spain. (This is taken from the History of Economics publication.)

It is noted here that over-spending on military is counter-production. It is destructive to the society that has to carry such a heavy burden.

Gold had been used to maintain a Constant Money Supply. In Spain the Constant Money Supply construct was violated. This became an instance of non-producers and counter-producers stealing the value out of the money units in circulation, transferring the value to the new introduced gold. This led to a great devaluation of the gold in Spain and a failed economic system. Non-producers and counter-producers took much value out of the gold by expanding the amount of gold in circulation without exchanging production for it.

The Producers over time developed economic systems. Step by step, they brought economics systems to more efficient, secure, standardized and prosperous levels. Unfortunately the non-producer and counter-producers continued to follow along, covertly and overtly, developing destructive methods used to steal the money value, energy, wealth, capital and power out of the economic systems and from the Producers.

The technology developed here in Producer Rewarded Open Market Economics has given us tools we can use to create a prosperous economic system. We can also use this technology to protect and secure the Producers and their production. This technology can be used to standardize economics systems and money units. Applying the technology of Producer Rewarded Open Market economics will bring about efficient and secure prosperous economic systems where the Producers can prosper; where families can have a bright and secure future; where societies can grow and expand in prosperity; where Nations can live and exist side by side without the presence of war or the threat of war. Mankind can have a future filled with hope and prosperity. We will find environments free of the poisons and destruction laid down by the non-producers and the counter-producers.

This article is the third article in the series of articles covering Axiom four, “Maintain a Constant Money Supply.”

A medium of exchange began to be needed and wanted in order to make the transfer of production value more efficient and practical.

With the absence of a defined money unit, we found products being traded in ratios to each other by the Producers to satisfy their needs and wants or demands. This was the system of exchange in economics before the money unit was conceived and developed. The money unit became the medium or intermediate step where value could be transferred during the sale of products on the Open Market. The money unit with its newly transferred value could be used to purchase other products. The symbol of the money unit, used for the value transfer, has had many forms down through the ages.

Production Value is the exchange value commodities, trades, goods and services have in relation to each other when exchanged on the Open Market, a Market that is open to all on equal terms.

Value is importance, worth or usefulness of a commodity, trade, good or service. Competition among commodities, trades, goods and services on the Open Market establishes the importance, worth or usefulness of each commodity, trade, good and service. This competition is propelled by the forces of demand. The needs and wants, placed in terms of demand, thrust forth by the Producers, establish the importance, worth or usefulness of commodities, trades, goods and services. Competition on the Open Market along with the demands of the Producers gives commodities, trades, goods and services their value.

Demand is a directedforce put forth by Producers driving the competition on the Open Market. The competition doesn’t just happen by itself; it is driven by a directed generated energy force. This directed energy force is created by Producers. It is an energy force directed in the direction of prosperity. This force gives the Open Market its life. The Open Market is like a living entity driven by the directed demand energy created by the Producers.

You could say the Open Market is like a living entity. The Open Market gets its energy from the Producers. This energy comes from commodities, trades, goods and services marketed on the Open Market and from Producer directed demand forces. The Open Market is living, it is dynamic. Producers create the Open Market by placing their commodities, trades, goods and services on the Open Market. They then generate demand energy which they use to direct the competition among commodities, trades, goods and services. Producers put life into the Open Market.

When non-producer and counter-producers enter into a Market they pull energy out of the Market. They pull the market into recessions and depressions. They pull the life out of the Market. They suck the energy out of the organizations, societies, nations, mankind and the environment.

When the Market is broken down to its basic terms; we are really exchanging energy for energy. When a non-producer or counter-producer enters into a Market they suck the energy from the Market. They take commodities, trades, goods and services out of the Market without exchanging self-produced commodities, trades, goods and services for them. They in effect take energy out of the Market without replacing it with energy of their own. This act drains the Producer, families, organizations, societies, nations, mankind and environments of energy. It brings about a state of economic decline and puts Producers, families, organizations, societies, nations, mankind and environments on a path receding away from prosperity.

There is only one true Market. That true Market is the Open Market, open to all on equal terms. Whenever non-producers and counter-producers enter into an Open Market even very slightly that Market is no longer open to all on equal terms. It is a Market with a negative energy flow. That energy flow is out of the Market. This gives a receding economic condition. When we have a true Open Market energy is flowing into the Market. This gives a prosperous economic condition. It is very important to maintain a Market where energy is flowing into the Market. This leads to prosperity.

The Standardized money unit is the constant unit of measure that represents production value. It also represents energy, wealth, capital and power.

A Constant Money Supply standardizes the money unit as a unit of measure for production value and Producer generated energy. It is very important to maintain a Constant Money Supply. A Constant Money Supply gives a positive energy flow in the Open Market and maintains the Market as an Open Market.

An expanding money supply is a money supply that is not held constant. An expanding money supply causes a negative energy flow in the Open Market. Money received by expanding the money supply without placing production on the Market causes a negative energy flow away from the Market. In this case the energy flow is from prosperity to recessions. The economic conditions for individuals, organization, families, societies, mankind and environment are on a declining path. Expanding money supplies destroy Open Markets and prosperity.

When the value of the dollar was floated in 1971 it was taken off the Gold Standard. The money unit was floated. Then the money supply could be expanded by a Central Bank at the whim of the operators of the Bank. The dollar was now not standard. It was no longer a standardized unit of Measure. The result for the United States is an economic system that is no longer standardized. Today this economic system is operating with a money unit whose value is altered anytime the central bank expands the money supply. The Gold Standard was removed, as a way to maintain a Constant Money Supply. The removal of the Gold Standard allowed the money supply to be expanded by the Central Bank.

Before 1971 the money supply was held constant by defining each ounce of gold to be equal to 35 dollars. The amount of dollars allowed to be in circulation was equal to 35 times the number of ounces of gold held in a vault.

Expanding the money supply is like allowing the Meter or Pound to be arbitrarily changed in size and weight. This would be allowing these standardized units of measures to change over time. This would cause chaos throughout the societies. Floating a money unit, instead of holding it as a constant unit of measure, is an idea made by counter-producers and non-producers. From the moment they float the money unit, and from then on, they can continue to steal their money value, energy, wealth, capital and power from the Producers by expanding the money supply. There is a belief that money supplies must be expanded to maintain economic well being. When Producers and only Producers of the money are rewarded, money supplies can be held constant and the economic systems move toward more prosperity. Expanding money supplies rewards non-production and counter-production.

A Constant Money Supply maintains a very stable Medium of Exchange

Money, as the Medium of Exchange, is the intermediate step used during the exchange of commodities, trades, goods and services on the Market.

When money came into existence, money added a step in the exchanging of commodities, trades, goods and services on the Open Market. Instead of exchanging commodities, trades, goods and services directly for other commodities, trades, goods and services; the commodities, trades, goods and services were first exchanged for money. The value of the commodities, trades, goods and services was transferred to the money unit. The money unit was then used to exchange for other commodities, trades, goods and services. Value contained in the money unit was then transferred to another Producer for his/her commodities, trades, goods and services. This is when the money unit became the standardized measure for the value of commodities, trades, goods and services. This is why it is very important to maintain a Constant Money Supply. When the money supply is not held constant but allowed to expand, the money unit as the Medium of Exchange loses its standardization. When the money unit loses its standardization economic systems get destroyed.

It is much easier to transfer production value to a money symbol, a Medium of Exchange, than it is to transport commodities, trades, goods and services around to make exchanges directly among them. Once the product value is transferred to the money symbol, the Medium of Exchange, it is much easier to make purchases of other Producer’s commodities, trades, goods and services. The concept of a money unit came into existence to act as an intermediate step during the exchange of commodities, trades, goods and services.

Commodities, trades, Goods and services must be exchanged on the Open Market in order to determine the correct production value for each commodity, trade, good and service. When commodities, trades, goods and services are exchanged on a Market that is not an Open Market, not equal to all on equal terms, production value will not be correct. For example; in Markets where monopolistic practices are allowed, the production value created through a monopolistic individual or organization will usually be incorrectly higher. Monopolistic practices are a form of rewarding non-production and counter-production. Rewarding non-production and counter-production will lower money value.

Only where all Producers are in the Market on equal terms and only Producers are allowed to participate in the Market will the production value of all commodities, trades, goods and services exchanged on the Open Market be correct.

Rewarding non-production and counter-production places more money in circulation in relation to commodities, trades, goods and services on the Market. This leads to fewer commodities, trades, goods and services being on the Market in relation to money in circulation. The money value goes down as the non-producers and counter-producers bid up the prices of the existing commodities, trades, goods and services on the Market. When money is given to non-producers and counter-producers they are taking money without placing commodities, trades, goods and services on the market. This causes more money to be in circulation. This money is found in the pockets of non-producers and counter-producers. They use this money to bid up the prices of commodities, trades, goods and services on the market. This will cause money to lose value. It requires more money to purchase the same products. Inflation is the result of having fewer commodities, trades, goods and services on the Open Market in relation to money units in circulation.

In conclusion; during Marketing, value is transferred from commodities, trades, goods and services to the medium of exchange measured in money units. Money units become packets of value and can be much more easily transported over distances and used to purchase other Producers’ production. The money unit, used as a unit of measure along with a Constant Money Supply, increases the efficiency of and standardizes the economic system. A medium of exchange composed of money units was established. This medium of exchange becomes standardized when the money supply is held constant.

Producer Rewarded Open Market Economics The Science of Economics By R P Obrigewitsch June 29, 2012